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By Douglas Gillison
WASHINGTON, April 30 (Reuters) – The U.S. Consumer Financial Protection Bureau on Thursday finalized regulations to replace a Biden-era requirement for banks to collect demographic data on small business borrowers, according to a Federal Register notice.
The changes to the rule, which was mandated by Congress following the 2008 financial crisis, mark the Trump administration’s latest rollback of regulations intended to help prevent bias against racial and social minorities.
Following years of delays, the CFPB in 2023 under the former Democratic Biden administration finalized the rule, requiring banks, when lending to small businesses, to collect data on how the owners identified their race, gender, ethnicity and sexual orientation.
The rule sparked pushback from the industry and conservative critics, who said it far exceeded what Congress had envisaged and was an invasive burden that could ultimately reduce the volume of small business loans offered.
Banks sued to kill the rule. That and related legal challenges succeeded in pushing the effort into the new Trump administration, which then set about rewriting the rule to reduce its requirements.
(Reporting by Douglas Gillison in Washington; editing by Michelle Price, Elaine Hardcastle)